Can a Court Impose Special Levies Even When the Ownership Has Voted No?

The case of The Owners, Strata Plan VR 611, 2017 BCSC 14, is a recent decision of the BC Supreme Court wherein the Court was asked to approve a special levy for repair and maintenance purposes when the owners refused to approve the special levy at a general meeting.

The strata corporation was initially constructed in 1980, with minimal maintenance and repairs completed since that time to maintain the building envelope. In 2013, the strata council obtained engineering advice noting that the building envelope required substantial repairs. The owners, however, didn't approve the repairs recommended in the 2013 report.

Further engineering advice was obtained in 2015, which recommended three different repair strategies. Even after several information meetings, the owners refused to approve any of the proposed repair strategies.

After all attempts to approve a special levy to begin repairs had failed, the strata council elected to apply to Court under section 173(3) of the Strata Property Act to ask the Court to approve the special levy:
Other Court remedies
173 (2) If, under section 108 (2) (a),
(a) a resolution is proposed to approve a special levy to raise money for the maintenance or repair of common property or common assets that is necessary to ensure safety or to prevent significant loss or damage, whether physical or otherwise, and
(b) the number of votes cast in favour of the resolution is more than 1/2 of the votes cast on the resolution but less than the 3/4 vote required under section 108 (2) (a),
the strata corporation may apply to the Supreme Court, on such notice as the court may require, for an order under subsection (4) of this section.
(3) An application under subsection (2) must be made within 90 days after the vote referred to in that subsection.

The Application was opposed by eight owners for several reasons: lack of funds of the owners, council's mismanagement of the repair obligations, and alternate repair options which would spread the work over a longer time period, etc.

The Court notes that it should not lightly overwrite the strata corporation's failure to obtain the necessary 3/4 vote. The factor to consider is whether the repairs and maintenance are necessary to ensure safety or prevent loss and damage.

Whether the repairs are necessary depends largely on the professional or engineering advice available to the strata corporation, regarding the professional's recommendations for the timing, extent and method of repairs.

In this case, the engineering advice provided a third repair option that attempted to compromise between the necessary remediation work and the financial circumstances of the owners. It was also clear from the engineering reports that the repairs were required to prevent significant damage to the building.

As a result, the Court found that the special levy required to fund the repairs was necessary to prevent significant loss or damage. The Court also noted that it may be financially difficult for some owners to raise financing to fund the remediation work, but that there were financing options available to those owners: a majority of owners shouldn't be prejudiced in preserving their ownership interest because a minority cannot afford to proceed with necessary remediation work in a timely and cost efficient manner.

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